This must be a recession; even Google is hurting

It seems like Google can do no wrong, and from reading the story they haven’t. But in this economic climate, that couldn’t stop their stock from slipping by 7.6 percent. As a matter off fact, Google is still growing. It’s making more money than ever before; it’s just that it didn’t meet expectations.

And you’re the problem.

All that paid advertising littering Google search pages is worthless until you click on it.

The trouble may stem more from reluctant consumers than advertisers.

The number of paid clicks on the Web sites operated by Google and its partners during the second quarter fell 1 percent from the first quarter, the first sequential downturn that the company has ever reported in the category. The 19 percent year-over-year increase in Google’s paid clicks also was the company’s lowest ever.

“Consumers are being cautious in their online spending patterns, just as they are in their off-line spending patterns,” Varian told analysts during Thursday’s conference call.

And even clicking isn’t a simple as you’d think. Google is getting sued for allegedly manipulating the system using “parked” sites. Maybe I’m an idiot, and maybe I’m missing something obvious, but I don’t see anything fraudulent about that. Here’s an example of a parked site. I’d imagine someone gets billed every time you click on a link there. That seems stupid, but all pay-per-click systems seem equally stupid to me.

In Austin, it doesn’t seem like Google is too worried about any of this. They’ve hired a couple people I know right out of the University of Texas, and they’re moving their offices to a downtown location. That won’t save them any money.

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Published in: on July 18, 2008 at 3:43 am  Comments (3)  
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3 CommentsLeave a comment

  1. This must be a recession; even Google is hurting…

    It seems like Google can do no wrong, and from reading the story they haven’t. But in this economic climate, that couldn’t stop their stock from slipping by 7.6 percent. As a ma tter off fact, Google is still growing. ……

  2. why do you say pay per click is stupid? Just curious. I use adsense and it works like a charm and gets the word to the folks that need to get it… Just curious what I am missing.

  3. Three years later, I probably wouldn’t call pay-per-click stupid. My skepticism is based on nothing more than the fact that I rarely purchase products after being diverted the a retailers web site by an advertisement. Generally, I know what I’m looking for, I find it without ads, and then I buy it. However, this is far from scientific.
    Now I’d guess that, contrary to my thinking then, it’s probably a good deal for all parties concerned.


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